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Thermo Fisher Scientific Inc (NYSE:TMO)
Beneish M-Score
-2.64 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.64 suggests that the company is not a manipulator.

TMO' s 10-Year Beneish M-Score Range
Min: -3.03   Max: -0.55
Current: -2.64

-3.03
-0.55

During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -0.55. The lowest was -3.03. And the median was -2.45.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.7688+0.528 * 0.9253+0.404 * 1.0098+0.892 * 1.2248+0.115 * 0.7342
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0452+4.679 * -0.0208-0.327 * 0.9399
=-2.64

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $2,538 Mil.
Revenue was 3918.8 + 4492.8 + 4171.4 + 4321.9 = $16,905 Mil.
Gross Profit was 1822.5 + 2091.9 + 1933.6 + 1846.5 = $7,695 Mil.
Total Current Assets was $6,181 Mil.
Total Assets was $41,857 Mil.
Property, Plant and Equipment(Net PPE) was $2,384 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,736 Mil.
Selling, General & Admin. Expense(SGA) was $4,857 Mil.
Total Current Liabilities was $6,861 Mil.
Long-Term Debt was $10,696 Mil.
Net Income was 385.1 + 601.2 + 471.6 + 278.5 = $1,736 Mil.
Non Operating Income was -3.9 + 4.9 + 5.2 + 1.5 = $8 Mil.
Cash Flow from Operations was 80 + 953.7 + 676 + 888.7 = $2,598 Mil.
Accounts Receivable was $2,696 Mil.
Revenue was 3903.5 + 3466.9 + 3191.8 + 3240.1 = $13,802 Mil.
Gross Profit was 1620 + 1481.7 + 1347.9 + 1363.2 = $5,813 Mil.
Total Current Assets was $7,306 Mil.
Total Assets was $46,134 Mil.
Property, Plant and Equipment(Net PPE) was $2,489 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,115 Mil.
Selling, General & Admin. Expense(SGA) was $3,794 Mil.
Total Current Liabilities was $5,392 Mil.
Long-Term Debt was $15,197 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2538 / 16904.9) / (2695.5 / 13802.3)
=0.15013398 / 0.19529354
=0.7688

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(2091.9 / 13802.3) / (1822.5 / 16904.9)
=0.4211472 / 0.45516389
=0.9253

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (6180.5 + 2384.2) / 41857.3) / (1 - (7306.1 + 2488.7) / 46133.7)
=0.79538336 / 0.78768666
=1.0098

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=16904.9 / 13802.3
=1.2248

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1114.5 / (1114.5 + 2488.7)) / (1735.5 / (1735.5 + 2384.2))
=0.30930839 / 0.42126854
=0.7342

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(4856.5 / 16904.9) / (3793.8 / 13802.3)
=0.28728357 / 0.27486723
=1.0452

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((10696.2 + 6861) / 41857.3) / ((15196.9 + 5391.5) / 46133.7)
=0.41945372 / 0.4462768
=0.9399

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1736.4 - 7.7 - 2598.4) / 41857.3
=-0.0208

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.64 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Thermo Fisher Scientific Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.99951.72650.4050.94640.990311.09440.94561.02840.9871
GMI 1.01331.09741.05950.97421.00640.97920.98020.97981.00220.9522
AQI 1.19261.2490.99820.95580.99371.01891.02381.00090.83381.2464
SGI 1.19361.442.57051.07710.9631.04561.09351.08231.04641.2902
DEPI 0.66241.89810.43010.97541.03251.04811.01810.95841.00460.8817
SGAI 1.01881.0120.89320.98061.02940.98411.03450.99790.98171.1011
LVGI 1.31740.68750.91340.90881.01291.02271.8861.0061.19181.0425
TATA -0.0201-0.0113-0.0341-0.0208-0.0365-0.0203-0.0146-0.0315-0.0214-0.0173
M-score -2.46-1.12-1.77-2.56-2.70-2.54-2.67-2.62-2.64-2.28

Thermo Fisher Scientific Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.94540.9521.00931.02211.0321.29661.20091.04670.98710.7688
GMI 0.98030.98210.99530.99740.99911.00320.99620.97220.95220.9253
AQI 1.00090.98820.96390.94720.83381.04871.10261.12471.24641.0098
SGI 1.08241.05581.04461.04031.04281.09161.16491.23141.29021.2248
DEPI 0.95840.96071.00650.99531.00461.19681.07890.96230.88170.7342
SGAI 0.9980.98460.98640.9830.98341.03441.05651.08741.10111.0452
LVGI 1.0061.02761.02580.93571.19181.35511.28611.27171.04250.9399
TATA -0.0315-0.0264-0.0222-0.0211-0.0214-0.0058-0.0162-0.0177-0.0173-0.0208
M-score -2.62-2.62-2.56-2.52-2.64-2.23-2.28-2.39-2.28-2.64
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